Published by the MIT News Office at the Massachusetts Institute of Technology, Cambridge, Mass.

'Bidding Contests' Feared; Extra Athletic Aid Barred

IVY REACTION
'Bidding Contests' Feared;
Extra Athletic Aid Barred

Ivy League colleges, in separate statements on the Justice Department 
consent decree, have recommitted themselves to financial aid based 
solely on economic need.

Harvard expressed concern about low- and middle-income students, 
including minorities, and warned about potential "bidding contests" for 
students, if the Justice Department succeeds in its expressed aim to get 
colleges to divert "scarce financial aid funds" and make awards "in 
excess of need." 

The Justice Department suit's first detailed point, in its list of 
alleged violations, was the universities' agreement not to offer aid 
"based on merit, such as academic achievement, talent or diversity," in 
the words of the antitrust suit. Assistant Attorney General James F. 
Rill, summarizing the suit at a news conference, made this his primary 
point. He said, "What we charged in the complaint was an agreement to 
base aid not on merit, to preclude merit-based aid...."

Brown, Columbia and Yale said they would seek redress through 
Congressional legislation. Most of the eight said the lengthy and costly 
legal battle prompted them to sign the consent decree. Dartmouth said 
its legal bill was $400,000, enough for 40 typical scholarships. Brown 
reported its legal expenses were $250,000.

The Boston Sunday Globe, in an editorial entitled, "Financial Aid for 
the 'Haves'," concluded: "In a normal antitrust case, manufacturers 
collude to fix prices, thereby forcing consumers to pay more than the 
free market would dictate. In this case, the alleged collusion not only 
is above-board but also is aimed at the socially justifiable purpose of 
ensuring that tuition discounts--which is what financial aid amounts to-
-go to those who need them most.

"The effect of the Justice Department effort is to shunt scarce 
financial-aid dollars away from less affluent students, directing them 
to students whose parents are more likely to be part of the Republican 
constituency. It is one more lamentable round in the 'revolt of the 
haves,'" the Globe said.

Harvard General Counsel Daniel Steiner commented last Wednesday:

"We reluctantly abandon the agreement and cooperation among universities 
on financial aid. These practices have served important public-policy 
purposes by ensuring that financial-aid dollars are available on an 
equitable basis to the largest number of students who need financial 
assistance to attend college.

"While the consequences of the decree are unclear, we are concerned that 
awards may be made in excess of need, and that scarce financial-aid 
funds will be diverted from serving the broadest number of needy 
students. We have already seen in other parts of the US too much 
evidence of 'bidding contests' for students.

"It is essential that financial aid continue to be available to low-and 
middle-income students, many of whom are minority students. We will 
monitor the situation very closely. If our concerns prove to be well-
founded, we will do everything possible to find a remedy that will 
reinforce the long-standing congressional policy of channeling financial 
aid to the nation's neediest students. We will maintain the policy of 
awarding aid solely on the basis of need."

Dartmouth College President James O. Freeman said, "We remain opposed to 
the introduction of scholarships that are not need-based. Giving 
students more financial assistance than they actually need is not a wise 
or efficient use of our limited scholarship resources."

Dartmouth College counsel Cary Clark said the investigation by the 
Justice Department had caused major additional administrative and 
financial costs at Dartmouth and other schools at a time when staffing 
levels and budgets have been under considerable pressure. "The best 
thing that can be said about this investigation," said Clark, "is that 
it is over."

Yale University's statement noted the settlement "permits an athletic 
league, such as the Ivy League, to continue to maintain a policy under 
which member institutions agree to award aid to athletes only on the 
basis of financial need."

Yale President Benno C. Schmidt Jr., an attorney, commented, "While we 
disagreed with the [Justice] Department, we believe that litigation 
would have been extremely costly and would not have best served the 
interests of the University. 

"Nonetheless, the equitable provision of financial aid to needy students 
remains one of the critical public-policy issues in education today, 
since it is key to the continued accessibility of higher education to 
millions of Americans. The extent to which colleges and universities 
should be permitted or encouraged to act cooperatively or 
collaboratively with each other in the definition of need or provision 
of financial aid is a question that we believe Congress should address 
in the context of national policy on student aid." He said Yale intended 
to pursue such a legislative solution.

Cornell President Frank H.T. Rhodes said, "The overlap exchanges on 
students aid have served important public purposes that, in principle, 
had the endorsement of Congress and the higher-education community."

Columbia University's statement said, "We must now look to the Congress 
to recognize the importance of allowing colleges to cooperate in 
maintaining need-based financial-aid programs, and we will seek 
appropriate legislative action to permit such cooperation."

Princeton President Harold T. Shapiro, affirming need-based aid, said, 
"Awards in excess of need either divert resources from needy students or 
require an increase in revenues or reductions in other programs to 
support aid above the level of need."

The University of Pennsylvania's general counsel, Shelly Z. Green, said, 
"Penn enters into this decree most reluctantly and solely to avoid the 
substantial expense of protracted litigation with the Justice 
Department. We believe that the Ivy League schools' agreement among 
themselves to award financial aid exclusively on the basis of need was 
not only lawful but sound." 



							Kenneth D. Campbell